Today, Samsung announced they were getting out of the LCD business to focus all of their efforts on OLEDs. OLED displays, while initially far outshining their LCD counterparts, have historically had issues with fabrication yields, which made the displays prohibitively expensive, and for a very short (under 12 month) service life. Initial sets lost about half their brightness in 12 months.
While for the last several years, OLED demonstration TVs have been featured at the Consumer Electronics Show and Sony actually brought one to market, they have generally been science experiments and thought to be non-viable for the mass market. Samsung’s move suggests they have found the magic formula to making these displays, hit performance and price benchmarks and, if that is true, LCDs are dead.
If they don’t have this magic formula they just kissed their market leadership goodbye, so this move doesn’t come without a lot of risk.
OLED vs. LCD
LCDs are the current standard for TVs and monitors and they largely beat out the competing plasma technology by initially lasting longer and eventually looking better in the kind of well-lit room that exemplifies most TV display areas. However, they lagged plasma displays in quickness (which causes ghosting, particularly in 3D sets) and in blacks, which trend towards dark gray.
OLEDs potentially blend the benefits of both display types; they put out more light than plasma so they look better in a well-lit room, and they are faster than LCS so there will be no 3D ghosting. And their blacks are true black. The end result is a display brilliance that can make both an LCD and a plasma display look faded and inadequate in a well-lit room. Combined with 3D technolog,y it can come very close to the kind of image quality you’d get looking through a window into a real outdoor scene.
They have one other massive advantage; they are very cheap to run, pulling a fraction of the 500 watts of power many large screen TVs pull for the same screen size. One potential disadvantage is their similarity to plasma may make them susceptible to burn-in, where an image left too long on the screen actually burns into the display. I say this is a “potential” problem because I’ve never seen it actually demonstrated and it could be prevented by assuring the display doesn’t remain on a fixed image for an extended period of time.
So in short, with one possible exception, the technology represents the best of both plasma and LCD and thus could make both obsolete if it can be sold for an acceptable price and holds up like an LCD does. If you haven’t seen one, it is catch-your-breath beautiful and could certainly drive a premature TV replacement.
To give you an idea this link takes you to a picture comparison for that first Sony OLED TV.
Samsung’s long game
The fact that Samsung is exiting the LCD business has some other implications. Their war with Apple locked them out of Apple’s PC and coming TV business and by spinning out their LCD component; in theory, the spin out could get this business back. In addition, not only will this separate division be able to sell into Samsung, but it could more easily sell into Sony and other TV markers as well that likely will balk at buying from a competitor.
Still, this move looks like Samsung is signaling a massive move toward OLED and that alone could freeze a portion of the market which might now decide to hold off a new TV purchase until these new OLED sets arrive. This makes it one hell of a risky move.
While Apple likely has played a part in this decision by announcing the move to OLEDs (which Samsung could have avoided) they are clearly signaling the early end of life for LCD technology. As a market leader, this likely will throw other TV makers into a panic to reach final product before the market abandons LCDs and leaves the vendors who haven’t moved living on an ever smaller value priced TV set island.
Moves like this can kill vendors, they can also cause a vendor to corner the market, Samsung is taking one heck of a risk but, if it pays off, it will certainly be more than worth it.
President and Principal Analyst, Enderle Group
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